Roll Over, Beethoven: Three Management Lessons From The World's Most Disrupted Industry

When the winds of change rise, says the old Chinese proverb, ordinary people build walls, while extraordinary people build windmills.

The music industry may have faced stiffer winds in recent years than any other, gales that have scattered the walls built by even the wealthiest and most determined gatekeepers of the traditional recording industry.

And in the Internet era, no new landscape is host to more raucous, eclectic and competing hordes of pioneers, speculators and reactionaries. And no landscape may offer more lessons about how to go past the usual lip service about embracing change in order to actually shape change and profit from it.

Brian Zisk, founder of the semi-annual SF MusicTech Summit, has made it his mission to help bring cosmos from out of the chaos of the music world. The Music Tech summit, which convenes on May 28 for the 13th time, reflects his view that the art of music is now inextricably a part of a larger ecosystem that includes technology and business.

Zisk and his colleagues embrace three notable approaches, while helping reshape how music is created and composed and curated, how it’s distributed and discovered and shared, how artists can interact with their audiences—and, of course, how music still can be monetized amid all these changes.

These approaches, which could be invaluable for managers and leaders in most industries today, include:

1. Turn uncertainty into a party with a purpose

If you realize that all things change, there is nothing you will try to hold on to. -- Lao Tzu, 6th century B.C.

Cryin' won't help you, prayin' won't do you no good/ When the levee breaks, mama, you got to move. -- Led Zeppelin, 1971 A.D.

On his own
LinkedIn page, the infectiously enthusiastic Zisk lists himself simply as a “connector.” The Music Tech summits are based on the idea that new possibilities are best sparked when the right mix of people come together, regularly, in an environment that promotes a positive outlook on change and that provides a structure for connecting people and facilitating deals. He dials in the fun while maintaining a keen mindfulness on the time constraints faced by many of the attendees.

The results over the past dozen summits are remarkable: Some 10,000 people have attended and at least 10,000 deals have been made, by Zisk’s estimate. Some 1,500 music/tech startups have participated, a hundred million dollars of financing has been moved forward, and many hundreds of jobs and gigs have resulted.

2. Put the larger community first

Zisk asks attendees to “focus on what helps the whole ecosystem, rather than what’s just in it for you…. And make sure you're having a good time and that the people who associated with you are having a better time because they're associated with you. People like being around positive people.”

In his how case, he says he doesn’t worry about maximizing the all-important sponsorships for his events, but rather, “I try to maximize how much fun everyone has.” He knows that an indirect result is that sponsors will come back gladly for future rounds.

He takes pride in how some people who attend the summits have little direct connection to the music business, but who come in order to immerse themselves in the innovation ecosystem that he and his colleagues have created.

3. Build a following the old-fashioned way

A poster of the Beatles on display in an Apple Store in Santa Monica, California on December 7, 2010. Some business principles that drove the Fab Four's success still apply today. Others don't. (Image credit: AFP/Getty Images via @daylife)

I ask Zisk whether the Beatles or Rolling Stones could have been heard above the noise of today’s impossibly loud and broad array of artists on YouTube and iTunes. He points out that, despite the way that record studios opened doors for the Beatles and Stones in their era, they still had to begin the old-fashioned way: By gradually building communities of fans through constant work and constant connecting, until they caught fire.

What applied to them 50 years ago applies today. Macklemore and Lewis recently exploded into the public consciousness through YouTube, without a record label’s backing, but only after first achieving a critical mass of a small and loyal audience.

Today, technology offers several ways for artists to connect intimately with a small audience and nurture it into a bigger community. Tech helps some artists to arrange (and monetize) personal interactions like meet-and-greets with fans; some will personally deliver cookies to fans; some will offer extra musical treats only to special premium fans; some will crowdfund concerts as a way to find their audience more effectively.

The specter of computer-generated rhythms and melodies and computer-augmented composing may frighten some purists. But the human aspect of music will be more important than ever, Zisk argues.

John Naisbitt predicted 30 years ago, in Megatrends, that high tech would actually fuel hunger for “high touch” in a society. Accordingly, he predicted, movie theaters and sports stadiums and musical performances would still be filled long after we’d gained the ability to watch such fare in comfort at home. Take a look at Iron Man 3’s box office totals or the cost of a Super Bowl or Rolling Stones concert and try to argue against this crucial human principle that drives all business and art. Indeed, the face-to-face connection between performer and audience may increasingly become the main way to monetize a career, and certainly to sustain it.

Small wonder that the arts would be one of the first industries to be blasted by the winds of Internet technology. Shiva is the Indian god whose cosmic dance destroys old worlds and paves the way for new ones. Shiva is the appropriate archetype of the gale of creative destruction popularized by the economist Joseph Schumpeter.

As the music world knows, and the rest of the world is finding, it’s time to throw caution to those winds and dance alongside Shiva.

I'm a Chicago-based writer and management consultant. I was an adviser and editor for many years for the father of modern leadership studies, the late Warren Bennis, and served as a longtime communications executive at the University of Southern California. My niche is exami...